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Git originates from the Linux kernel development and was founded in 2005 by Linus Torvalds.
Nowadays it is used by many popular open source projects, e.g., the Android or the Eclipse developer teams, as well as many commercial organizations.
A developer can copy (checkout) a certain version from the central sever onto their individual computer.
Both approaches have the drawback that they have one single point of failure.
For example, if you want to develop a new feature, you can create a branch and make the changes in this branch.
This does not affect the state of your files in other branches.
Typically, there is a central server for keeping a repository but each cloned repository is a full copy of this repository.
Of course, version control systems are not limited to text files, they can also handle other types of files.
For example, you may use a VCS to track the different versions of a png file.
A centralized version control system provides a server software component which stores and manages the different versions of the files.
Please note that this picture fits primarily to Git.
Other version control systems like VCS are typically used to track changes in text files.